July 26--SAN FRANCISCO -- The charge PG&E took in the second quarter alone for Northern California wildfire-related costs nearly equaled the company's $1.6 million penalty in 2015 for a natural gas explosion that killed eight and wrecked a San Bruno neighborhood in 2010. That was the largest regulatory punishment ever imposed on a U.S. utility, and the company was later found guilty of crimes it committed before and after that explosion, a verdict that branded PG&E a convicted felon.

Despite the net loss on the company's bottom line, PG&E's shares soared about 4 percent and closed at $44.70 after it posted profits from operations of $1.16 a share, which topped Wall Street's forecast of 95 cents.

PG&E has waged a campaign to change the state's legal framework for determining whether utilities and their shareholders -- or the companies' rate-paying customers -- ultimately pay for costs associated with wildfires sparked by the utilities' infrastructure. A state legislative conference committee is considering various proposals from Gov. Jerry Brown and lawmakers, but PG&E on Thursday labeled the governor's plan as "insufficient." Brown's proposal would ease utilities' future potential wildfire-related liabilities, but wouldn't apply to costs for the October 2017 wildfires.

San Francisco-based PG&E told analysts during the conference call that it may have to slash spending on maintenance, equipment and clean energy, unless it receives favorable outcomes from legislative proposals the utility supports in Sacramento. PG&E also said insurance premiums and its costs have jumped in the aftermath of the wildfires.

Gov. Brown's plan, if adopted, could dramatically ease the potential wildfire-related financial burdens on large utilities such as PG&E -- and potentially shovel more costs onto ratepayers' shoulders.

"The governor's proposal is constructive, but it is insufficient," said Geisha Williams, PG&E's chief executive officer, during a conference call "It is an important input, but more work is necessary. The time for action is now."

Other proposals include altering the use of a legal principle known as inverse condemnation, which holds utilities strictly liable if their equipment was a factor in starting a wildfire, even if the utility properly conducted maintenance and facilities upgrades; efforts to ease the financial burden from liabilities PG&E faces for the October 2017 fires; and a move to reduce potential costs from future wildfires.

Excluding the one-time costs associated with the October wildfires, PG&E would have earned $601 million from its operations in the three-month period that ended in June. Operating profits were 36.6 percent higher than in the second quarter of last year.

The utility's equipment and facilities were determined by state fire investigators to have caused 16 wildfires last fall, including 12 of the October wildfires in Northern California.

Of the 16 fire incidents, state investigators alleged that the company violated the law in 11 blazes in 2017.

If PG&E succeeds in , its effort to get the state to change how liabilities are assigned and paid, it could pass wildfire costs on to its customers.

That effort has prompted opposition, however, from insurance companies.

"The insurance industry is saying hold your horses in terms of getting rid of inverse condemnation," said Paul Patterson, an analyst with Glenrock Equities. "A whole ecosystem related to inverse condemnation has been built up over the decades that may be tough to change in a month."

PG&E said it must navigate an increasingly challenging landscape for insurance coverage in the wake of the fires.

"Some carriers have significantly reduced their exposure by reducing limits or excluding events that were previously covered, and all have significantly increased their premiums," said Jason Wells, PG&E's chief financial officer, during the conference call. "We are seeking to transfer approximately $1 billion to $1.5 billion of financial risk to the insurance and capital markets."

The cost of this new insurance coverage is expected to be $350 million. At present, PG&E customers are covering, through a portion of their monthly bills, $50 million in costs for wildfire-related coverage.

Legislative proposals under discussion in Sacramento include wildfire safety and prevention, forcing utilities to upgrade their aging electricity systems, vegetation control, changing how liability for wildfires is assigned, using a bond measure to ease PG&E's financial exposure to the October 2017 fires, and creating a path to alleviate cost burdens from future wildfires.

PG&E warned it might have to chop capital spending if the Legislature fails to adopt wide-ranging reforms that are to the utility's liking. It also raised the specter of higher monthly gas and electricity bills for customers.

"We will never sacrifice safety-driven work, but as long as these flawed policies remain in place, we must carefully evaluate whether we can support our current level of capital expenditures," Williams said.

PG&E appears to be under intense pressure, said state Sen. Jerry Hill, a frequent critic of PG&E whose legislative district includes San Bruno.

"We are hearing a level of desperation from PG&E leadership," Hill said. "They know they are responsible for much of the fire damage and they desperately need to change the liability laws. PG&E won't rest until it changes the laws it keeps breaking."